Husband's Fundraising a Knotty Problem' in Clinton Nomination

As President-elect Barack Obama moved closer to making Sen. Hillary Rodham Clinton his choice for secretary of state, independent legal experts said unwinding some of the most nettlesome conflicts involving her husband's global fundraising would prove extraordinarily complicated.

Perhaps the best evidence of this is a perpetual donation to the William J. Clinton Foundation from Canadian tycoon Frank Giustra, in which Giustra has promised to give the charity half of the future profits from his global mining empire for the rest of his life.

The unorthodox arrangement could present ethical concerns for Sen. Clinton if foreign governments believe they can curry favor with her by helping Giustra's far-flung mining operations, or if they fear that restricting his activities would damage their relations with her.

"It presents a really serious problem because the decisions a Secretary Clinton might make could be perceived as affecting the [charity's] cash flow," said Stephen Gillers, a legal ethics expert at New York University School of Law.

The situation underscores the complexity of the negotiations in which top aides to Obama and Clinton engaged over the past week. Those familiar with the talks said they covered a range of concerns, including the former president's profitable public speaking, his global investment work and a mostly secret network of donors to Clinton initiatives.

Clinton advisers say they diligently worked to resolve questions. The Clinton Foundation, for instance, turned over 208,000 donor names for review by Obama's transition team, even though many donated with promises of anonymity.

"Bill Clinton has said publicly he will do whatever they want," said one Democrat with ties to Clinton who is familiar with the negotiations. "Not just with the Giustra stuff, but with the library, the foundation, the donors -- he has demonstrated the willingness to go above and beyond."

At the same time, those close to the former president said they would be reluctant to see him back away from charitable work that has provided a source of AIDS treatment for 1.4 million people, a major engine in the effort to reduce greenhouse gases and sponsorship of anti-obesity programs in American schools.

"The Clinton Foundation is not the same as the Clinton personal bank account," said Thomas E. Mann, a Brookings Institution expert on ethics and governance. "It's a nonprofit entity. It has an extraordinary involvement in a whole set of public activities."

Nevertheless, vast amounts of money and prestige are involved, and those factors could pose problems for lawyers at the State Department who work to prevent ethical conflicts from corrupting the nation's foreign policy.

Edwin D. Williamson, who served as the State Department's chief legal adviser under President George H.W. Bush, said he does not know how the agency would resolve the potential conflicts. "If a client came to me with this set of facts, I would describe it as nightmarish," he said.

Several experts said they could not envision a solution that would not involve the former president backing away from global fundraising to some extent.